标签： Oceania

One of Australia’s four largest domestic banks has taken the unusual step of raising fixed mortgage interest rates for a second time in just three weeks, piling additional financial pressure on home loan borrowers just days ahead of a highly anticipated monetary policy meeting from the Reserve Bank of Australia (RBA).

On Thursday, Westpac Banking Corporation confirmed it would lift its fixed interest rates across all loan terms spanning one to five years by 0.15 percentage points, marking its second upward adjustment in 21 days. Following the change, the bank’s lowest available fixed rate now sits at 6.29% for a two-year fixed home loan. Cumulatively, Westpac has increased its fixed mortgage rates by a total of 45 basis points over the three-week period. Even after the consecutive hikes, analysis from financial comparison platform Canstar confirms Westpac still offers the most competitive fixed rate pricing among Australia’s big four banking institutions.

Industry analysts note this move is far from an isolated adjustment, pointing to a widespread trend of repricing across the Australian lending sector driven by growing expectations of persistently high inflation and additional RBA rate increases. Sally Tindall, Canstar’s director of data insights, explained that most major and minor lenders have been revising their pricing upward repeatedly in recent weeks as concerns mount over a resurgence in Australia’s annual inflation rate. “Our analysis shows more than 90 per cent of lenders have adjusted fixed rates higher since the RBA’s last policy decision, including all four of the major banks. Westpac and the National Australia Bank have both implemented two separate hikes in this window,” Tindall noted.

The scale of the repricing shift is stark: just 19 Australian lenders currently offer at least one fixed home loan product with a rate below 6%, down from 83 lenders offering sub-6% fixed rates at the same time last year. For home borrowers already struggling with soaring borrowing costs, this rapid round of adjustments sends a clear message: the window for locking in a relatively competitive fixed rate is rapidly closing, Tindall added.

Westpac’s rate hikes come as the bank’s economic team forecasts three more official RBA cash rate increases in 2026, starting with a hike at the central bank’s upcoming May policy meeting. Luci Ellis, Westpac’s chief economist, linked the expected monetary policy tightening to ongoing geopolitical instability in the Middle East, specifically the conflict that has disrupted shipping through the Strait of Hormuz — a strategic waterway that carries roughly 20% of global oil trade. Since the outbreak of hostilities in late February 2026, global crude oil prices have nearly doubled, climbing from roughly US$56 per barrel to around US$100 per barrel. For Australian motorists, this translates to an extra 10 cents per litre of fuel for every US$10 per barrel increase in crude prices.

Ellis explained that Westpac’s updated forecast accounts for extended fuel supply disruptions, as the Strait of Hormuz has remained effectively closed for eight weeks, with shipping only gradually returning to normal volumes. She added that the pass-through of higher fuel and energy costs to broader consumer prices in Australia has happened far faster than many economists previously projected. “We believe the RBA will respond to this accelerated pricing behavior by tightening monetary policy more aggressively than it would have if these cost increases had not filtered into broader inflation so quickly,” Ellis said.

In the wake of the recent ceasefire between Iran, Israel and the United States, Australia’s top political leaders gathered for the first post-ceasefire national cabinet meeting on Thursday, where Prime Minister Anthony Albanese issued a stark warning: the nation will face a long-drawn economic “tail” from the ongoing Middle East conflict, even with domestic fuel reserves now sitting higher than they were before hostilities erupted.

Albanese told reporters following the meeting that while Australia’s near-term fuel supply outlook remains secure, the federal government is actively developing contingency plans to counter potential future disruptions to both fuel and fertilizer imports. He credited voluntary behavior changes from Australian motorists and consumers for the steady growth in national petrol reserves, which now stand at 46 days of coverage. While this is still only 51% of the 90-day minimum reserve requirement set by the International Energy Agency, it marks a notable improvement from the 36-day reserve level recorded when the conflict first began in late February.

Even a complete, immediate end to hostilities and a full reopening of the strategically critical Strait of Hormuz would not erase the lingering economic impacts, Albanese explained. There is an inevitable time lag before global supply chains reset after two months of disrupted trade: clearing the waterway to restore safe passage, repositioning dozens of diverted or stuck cargo vessels from the Persian Gulf, unloading shipments, and returning vessels to their collection points to restart the regular supply cycle will take weeks of coordination. “So, there will be a long economic tail here,” the prime minister emphasized.

Currently, six fuel cargo vessels are en route to Australia carrying more than 300,000 litres of diesel, and the federal government is exploring options to secure additional cargoes through the global spot market. Albanese also highlighted that the government has made significant progress in diversifying Australia’s import sources to reduce reliance on traditional Middle Eastern suppliers: the U.S., which has historically not been a major fuel provider to Australia, now accounts for roughly 18% of the nation’s fuel imports, while Argentina – once a negligible supplier – now contributes double-digit percentages of imports, and Algeria has also joined the list of active fuel exporters to Australia.

Climate and Energy Minister Chris Bowen echoed the prime minister’s caution, noting that Australia still faces strong international headwinds, ongoing risks, and persistent market uncertainty over the medium term, but added that the government is leaving no stone unturned to position the nation to withstand any future shocks.

Amid the broader economic concerns, there are small signs of relief for Australian motorists heading into the upcoming Anzac Day long weekend. Wholesale fuel prices have been falling steadily for several weeks, and these declines are now being passed on to consumers at the pump, according to Peter Khoury, a spokesperson for the NRMA motoring association. Over the past three weeks, wholesale diesel prices have dropped by one Australian dollar per litre, while wholesale unleaded petrol has fallen by 70 cents per litre.

“Some good news finally for motorists,” Khoury said Thursday from Sydney. NRMA price tracking shows the majority of Australian retailers are now in the lower half of the national price range, with half of all Sydney service stations selling unleaded petrol for less than $1.90 per litre. “It is very clear that we’re in a better position than we were a couple of weeks ago, and that should continue into the long weekend, although looking at what is going on over the Middle East who knows how long that will last,” he added, urging motorists to compare prices using dedicated fuel price apps to lock in the lowest possible rates.

Even with recent price declines, however, industry analysts warn that the threat of sky-high fuel prices has not passed. New modelling from Primera Research shows that Australian diesel prices were on track to hit $3.90 per litre earlier this month, a crisis that was only averted by two temporary interventions. First, the federal government implemented a temporary cut to fuel excise and paused 32 cent-per-litre heavy vehicle road user charges for three months. Second, fuel retailers voluntarily absorbed massive losses to keep prices from spiking, collapsing their average profit margins to just 1.7% – far below the standard 9.8% margin.

“The $3.90 moment passed. But the costs that prevented it didn’t disappear; they were deferred,” said Robert Beerworth, managing director of Primera Research. The temporary federal excise cut is set to expire on July 1, which will trigger an overnight 32-cent-per-litre price increase that will ripple through the entire national economy. “Diesel moves every truck and every delivery in the country. When its price goes up, so does everything on the shelf,” Beerworth explained. Already, retailer profit margins are starting to recover to pre-crisis levels, pushing already absorbed costs back onto pump prices gradually – and the July excise cut expiry will bring all deferred costs to consumers at once. “The threat of $3.90-per-litre diesel had not evaporated,” he added.

Freshly released purchasing managers’ index (PMI) data from S&P Global has painted a mixed but largely concerning picture of Australia’s private sector economy, revealing stubborn and faster-than-expected inflationary pressures fueled by ongoing conflict in the Middle East. The April survey, which polls 400 manufacturers and 400 service providers across the country, shows that business activity stabilized this month following a contraction in March, but cost and consumer price inflation have both surged to 3.5-year highs, far outpacing economist forecasts.

Supply chain disruptions stemming from the Iran-centered war that broke out in late February have been the primary driver of rising costs, with the closure of the Strait of Hormuz cutting off roughly 20% of global oil supplies and choking off shipments of key raw materials from the Persian Gulf, including fertilizer and medical-grade helium for MRI machines. S&P Global economist Eleanor Dennison explained that Middle East conflict has put intense strain on manufacturing supply chains, pushing supplier lead times out to their longest since mid-2022. “Greater outlays on fuel and freight also pushed cost inflation to its highest in just under four years,” she added.

The data confirms that rising input costs are not being absorbed by businesses, but are instead being passed directly to end consumers, pushing “charge inflation” – the rate at which businesses increase prices for customers – to its highest level since late 2020. While the overall manufacturing benchmark edged back into growth territory in April after contracting in March, both manufacturing output and service sector activity registered sub-50 readings (the threshold that separates growth from contraction), with manufacturing output falling from 49.4 to 48.2. The service sector, meanwhile, bounced back from March’s sharp decline to stabilize near neutral, driven by modest job creation even as demand remains soft.

The biggest takeaway from the data, according to Judo Bank senior economist Matt De Pasquale, is that inflation is becoming more broad-based across the Australian economy than most analysts predicted. That outcome significantly increases the likelihood that the Reserve Bank of Australia will implement additional interest rate hikes to curb price growth, he argued. “What the data suggests is that inflation could be picking up broadly and more than was initially anticipated given that growth is holding up. That would support the RBA focusing on inflation, getting ahead of it with further interest rate rises,” De Pasquale told NewsWire.

There are limited bright spots in the latest snapshot: the overarching composite PMI, which measures combined private sector activity, bounced back into neutral territory after contracting in March, when the outbreak of war first sent shockwaves through global markets. New business orders did decline for the second consecutive month in April, as widespread economic uncertainty dented domestic sales, but export orders to key markets including North America, Asia, and New Zealand saw a small uptick.

Dennison warned against overstating the modest growth in the headline manufacturing index, noting that underlying indicators remain weak. “To understand how manufacturers are faring, we must look beneath the positive headline index print, as output, new orders, employment and stocks all fell at modest rates,” she said. “Despite growing price pressures and persistent weakness in domestic demand, latest data saw output stabilise following March’s decline.”

The conflict-driven supply shock is also rippling through regional trade networks, affecting Japan – Australia’s third-largest import supplier, which shipped $23 billion worth of goods to Australia in 2025, according to UN trade data. Japanese manufacturing output surged from 52.1 to 55.4 in April, hitting its fastest pace of growth in 12 years, as manufacturers rushed to produce goods ahead of expected further supply chain disruptions. That surge has however amplified input cost competition and extended delivery times, pushing Japanese business inflation to its highest in nearly four years. S&P economist Annabel Fiddes noted that “there were reports that some manufacturing firms boosted output due to concerns and uncertainty surrounding the war in the Middle East and the potential for further supply chain disruptions. The latter contributed to not only a much sharper rise in costs but the most pronounced increase in average delivery times for manufacturers’ inputs for nearly four years.”